As independent contractors, real estate agents are completely responsible for their own retirement plans. Here are 9 tips to help Realtors® save for retirement:
- Start saving early. The earlier you start saving, the more time your money has to grow. Even if you can only save a small amount each month, it will add up over time. Make a commitment to save a specific amount or percentage from each transaction.
- Contribute to a retirement account. There are a number of retirement accounts available to real estate agents, such as 401(k)s and IRAs. These accounts offer tax advantages that can help you save more money for retirement.
- Invest your money wisely. When you save for retirement, it’s important to invest your money wisely so that it can grow over time. There are a number of different investment options available, so it’s important to do your research and choose investments that are right for you. As a Realtor®, you have an advantage in real estate investments, but don’t forget stock, bonds, insurance products, commodities like gold, and fixed income like annuities.
- Get professional help. If you’re not sure how to save for retirement or invest your money, it’s a good idea to get professional help. A financial advisor can help you create a retirement plan and choose investments that are right for you.
- Review your plan regularly. Your retirement plan should be reviewed regularly to make sure it’s still meeting your needs. As your life changes, your retirement needs may change as well. Be sure to adjust your plan accordingly. An often sighted rule of thumb for asset allocation is to hold a percentage of stocks that is equal to 100 minus your age. So if you’re 40 years old, you should hold 60% of your portfolio in stocks.
- Don’t touch your retirement savings. It’s important to resist the temptation to touch your retirement savings unless it’s absolutely necessary. If you withdraw money from your retirement savings early, you’ll have to pay taxes and penalties.
- Create a budget. A budget can help you track your income and expenses so that you can see where your money is going. This can help you free up more money to save for retirement.
- Live below your means. If you can live below your means, you’ll have more money to save for retirement. This means making conscious choices about how you spend your money and avoiding unnecessary expenses.
- Be patient. Saving for retirement takes time and discipline. Don’t get discouraged if you don’t see results immediately. Just keep saving and investing, and you’ll eventually reach your retirement goals.
How do you save money on professional services? I love to hear agent feedback, and I would be happy to post your ideas (and give you the credit) in our next article. Just send an email to Robert@TheThriftyAgent.com.